Episode 106: COSTS INVOLVE WHEN BUYING A COMMERCIAL PROPERTY HELEN TARRANT
Cost involved in buying a commercial property.
A lot of people think that the only cost involved in commercial property or that commercial property is actually more expensive than residential. But it's not true. We're actually buying shops and retail shops and officespaces around on anywhere from $500,000 to $700,000. And we're looking at warehouses in regionalfor anywhere from $500,000 to $700,000. But on ...
Episode 106: COSTS INVOLVE WHEN BUYING A COMMERCIAL PROPERTY HELEN TARRANT
Cost involved in buying a commercial property.
A lot of people think that the only cost involved in commercial property or that commercial property is actually more expensive than residential. But it's not true. We're actually buying shops and retail shops and officespaces around on anywhere from $500,000 to $700,000. And we're looking at warehouses in regionalfor anywhere from $500,000 to $700,000. But on larger format freestanding buildings, $1.2M to $1.5M or even $2M , getting really good solar tenants. So it's not that more expensive to buy commercial than it is residential. However, the loan to valuation ratio is higher in residential than it is in commercial. Which means that you can actually borrow more in residential than you would commercial, but the cash flow is better in commercial,so it's a bit of a give and take. However, in residential you can borrow up to 80%. In commercial, you can also borrow up to 80%.And that is for a low doc loan ifyou're self employed in your own business, consultants, etc. For if you are paying G,then there's 70 75% loans available. So a deposit in commercial property can range anywhere from 20% all the way to 35%.The one big difference that commercial, that residentialdoesn't is that if you don't have servicing,you're not working and you're retired.You can still buy a commercial property because there's athing called a lease loan where it's not affected bywhether you're working or not or your serviceability is relyingon the lease to service the actual deal.But in order to access that youneed a large deposit, you need 35%. However, when you buy a commercial property,just like residential, there's some cost involved.There's stamp duty, there is pest and building reports, strata reports, legal fees and maybe potentially buyers agency fees or othersearch fees that you're not aware of.So listen to this podcast. Let me walk you through the different type of fees,especially when it comes to maybe uplift projects, set andforget and also the variety of buying in different states, how they vary from state to state.
So let me show you. And let me show you how much itcosts to put a deal together in commercial.
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Thank you for joining us on the Commercial Property Podcast - Australia, where you get to learn all about Investing in Positive Cash-flow Commercial Properties.
Helen Tarrant is Australia’s leading expert in commercial property investing.
With more than 20 Commercial properties of her own, educating hundreds of students and working with many clients all over Australia, she happily shares her insights, strategies and valuable experience with you, on buying the best commercial investment property for your needs.
In this podcast series you will learn from Helen, how every day Australians can get started with their first, or their next commercial investment property, whether that be to generate cash-flow for their lifestyle or to build wealth and plan for retirement.
Helen also shares her own case studies and those of her students and clients, so you can get deeper insights into the vast possibilities that commercial property offers and she also shows you how to avoid potential pitfalls, in your investing journey.
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